Rou­ble slides on oil, threat of more sanc­tions

The Financial Daily - - INTERNATIONAL -

MOSCOW: The Rus­sian rou­ble weak­ened on Wed­nes­day, with a re­treat in oil prices and a threat of new sanc­tions on Moscow for its role in the Ukraine cri­sis promis­ing to weigh on the cur­rency in the near fu­ture.

At 0738 GMT, the rou­ble was around 0.5 per­cent weaker against both the dol­lar and the euro, trad­ing at 67.15 76.32, re­spec­tively. Oil, Rus­sia's chief ex­port, fell to­wards $49 per bar­rel.

Rus­sian stocks rose, with the dol­lar-based RTS in­dex trad­ing 2.2 per­cent higher at 800.4 points and the rou­ble-based up 1.7 per­cent to 1,703.2 points.

An­a­lysts said a meet­ing of EU for­eign min­is­ters on Thurs­day to dis­cuss more puni­tive mea­sures against Rus­sia was the key fac­tor for Rus­sian mar­kets.

"Speak­ing of up­com­ing events that may have an im­pact on the Rus­sian stock mar­ket in the near fu­ture, I could not help catch my­self think­ing that the meet­ing of EU for­eign min­is­ters (to­mor­row) has be­come much more im­por­tant for us than the U.S. Fed­eral Re­serve meet­ing (today)," Stanislav Kleshchev, an an­a­lyst at VTB 24 bank in Moscow, wrote in a note.

The U.S. Fed­eral Re­serve's two-day meet­ing starts on Wed­nes­day, with mar­kets won­der­ing whether it will stand by plans to raise in­ter­est rates this year.

"The risk of tight­en­ing eco­nomic sanc­tions, whether by the ex­ten­sion of re­stric­tions on the sup­ply of equip­ment for power sta­tions, or dis­con­nect­ing Rus­sia from SWIFT, or a ban on EU in­vestors ac­quir­ing Rus­sian sov­er­eign debt, seems more acute than the in­trigue of the terms of the Fed's mon­e­tary tight­en­ing." -Reuters

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